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Level 1

Question

Law suit

Forum|Forum|2 years ago
October 25, 2023
1 reply
13 views

I received a settlement from a car accident this year, is this taxable income?

Ask the Experts - Extension - Sept 2023

A

Anonymous

Lawsuit settlements from car accidents are generally not treated as taxable income. The IRS does not treat personal injury settlements, including those from accidents in a car, as income that is taxable. However, if the settlement includes payments that include compensation for lost wages or punitive damages, those may be subject to taxation.

I doubt it was compensation for lost wages or punitive damages, it was probably just personal injury settlements, which are not taxable.

Thank you,

John

CPA